Can the Constitution allow expropriation without compensation for land reform purposes?

30 March 2017

Ahead of the December 2017 elective conference, the National Executive Committee (NEC) of the governing party will hold a meeting to discuss the “land issue”. It is apparent to even the uninterested observer, that it appears as if the party cannot agree on the meaning of the property clause in the Constitution.

Both the President and the Minister of Rural Development and Land Reform are quoted in the media as advocating for expropriation without compensation to expedite land reform.  Initially, the President seemed to be advocating (in the same vein as the third largest political party, the Economic Freedom Fighters) for an amendment to the property clause, to exclude compensation for expropriation, without due regard to the purpose of the expropriation. Lately, the President is quoted by the media as advocating for a position suggesting that expropriation without compensation for land reform within the current framework of the property clause is possible.

How true is the President’s position? Can expropriation without compensation or expropriation against low or nominal compensation be justified simply because the expropriation is aimed at a constitutionally legitimate purpose such as land reform?

To answer those questions - recourse must be had to the meaning of section 25(8) of the Constitution:

“No provision of this section may impede the state from taking legislative and other measures to achieve land, water and related reform, in order to redress the results of past racial discrimination, provided that any departure from the provisions of this section is in accordance with the provisions of section 36(1).”

Should the above provision be interpreted -  as the President is so inclined - to mean that the compensation requirement is the one provision in section 25 that can be departed from for land reform purposes? In addition, since the property clause also states that in calculating the compensation amount, the purpose of the expropriation must be considered -  does this seemingly support the contention that for land reform purposes, there is justification for not paying compensation?

This interpretation however does not find any legal support. It is an established principle that expropriation is likely to be unfair in the absence of compensation. This is true even in jurisdictions including Austria and Ireland, where their property clauses do not specifically require compensation. The European Convention on Human Rights of 1950 for example, is interpreted to require compensation for all expropriations. Academics such as Van der Walt, writing in Constitutional Property Law argue convincingly that on this basis, expropriation would most likely be unconstitutional if the expropriation is not compensated either at all, or is compensated at a lower value than the constitutional considerations, merely for the reason that it relates to land reform. Van der Walt asserts that even if the purpose of expropriation is land reform, this should not mean no compensation, or indeed that compensation should be at a lower rate.

As the Constitutional Court made apparent in Port Elizabeth Municipality v Various Occupiers,

“The purpose of section 25 has to be seen both as protecting existing private property rights as well as serving the public interest, mainly in the sphere of land reform but not limited thereto, and also as striking a proportionate balance between these two functions.”  

As such, this means that no one provision in the property clause should be read holistically and no one provision should be applied in the abstract without a reference to the other provisions. This makes it highly unlikely that compensation without expropriation, even for land reform purposes, could ever be within constitutional parameters. 

It is true that after more than two decades, the land reform programme has, by and large, failed to ensure equitable access to land and other resources for South Africans. This creates all the more imperative for urgent, factual debates on the “land issue”, informed by the Constitution.

The preamble to the recently published Draft Regulation of Agricultural Land Holdings Bill, which seeks to ban foreign ownership of agricultural land, among other things, relies extensively on section 25(8) quoted above. This reflects on the part of the governing party, the intention to increasingly use those provisions as a regulatory tool, in a possible bid to avoid paying compensation in instances of expropriation.

It is ultimately only for the Constitutional Court, in interpreting the Constitution, to determine the direction and spirit in which compensation is calculated. Of course, the Executive’s freedom of political choice in conceptualising and implementing policies, and the legislature’s prerogative of enacting laws, should not be unnecessarily impinged by the courts. Nonetheless, the spirit, purport and object of the compensation provision and property clause cannot be contradicted for the sake of political expediency. 

By Ms Phephelaphi Dube, Director, Centre for Constitutional Rights, 30 March 2017